Substantially Higher Part B Premiums in 2007 As Medicare Means Testing Starts

[Lasher]

For the first time in Medicare's history, millions of seniors will be required to pay substantially more for their Medicare Part B premiums than other seniors next year. In 2007 the government will begin "income relating," or means testing. Higher income seniors will have to pay more for their doctors' services and outpatient coverage. The change, which comes as part of the 2003 Medicare drug legislation, could affect as many as 2.3 million seniors according to estimates by the Congressional Budget Office (CBO).

<snip>

Means testing of the Part B premium was one of the most controversial elements of the 2003 Medicare drug law. Neither version of the law originally passed by the House or the Senate even contained the provision. The Washington Post reported in 2003 that the House version of the legislation would have required Medicare beneficiaries to pay more for medicine under the new Part D drug plans. The provision to charge higher income beneficiaries more for the Part B premium rather than for prescription drug coverage was inserted at the last minute by the small handful of Congressional leaders who negotiated the final version of the law behind tightly closed doors.

Means testing radically changes the nature of Medicare. The program was designed as universal social insurance with everyone paying a uniform premium and receiving a standard package of benefits. Supporters of means testing argue that it's needed to cut Medicare costs and make the program more sustainable. Government estimates, however, indicate that higher premiums for some will not save Medicare.

http://www.tscl.org/NewContent/102589.asp

The 2006 monthly premium for Medicare part B is $88.50. In 2007 it will be about $88.50 for individuals who make less than $80,000 and couples who make less than $160,000. The 2007 premium is estimated to be $106.00 for individuals making up to $100,000 and more for those whose income is above this level Hit the above link to the full article for more.

This makes it difficult to compare premium increases with those of prior years. But even if you use only the lowest monthly premiums (for individuals making less than $80,000) the average annual increase during Junior's 8 years (2002 to 2009) is 11.21%. During Clinton's 8 years it was 4.19% and for Poppy it was 10.33%. Source data for these calculations was obtained from the above article, and from a CRS Report for Congress. The second year of presidency was used as each executive's starting point because increases were effective in January before a president actually assumes or leaves office.

[wakeme2008]

1. I have no problem with this

If you have over $100,000 per year income the additional money is a nit.

[GCP]

2. If it means saving Medicare - I don't have a problem with it

As someone who'll soon be eligible for M/C, and in a higher income bracket - I have no problem with the idea of paying more so that other people not so lucky can still get their M/C.
Call me a socialist - but I believe we all belong to this society and those with more should pay more to help out those with less.

[sandnsea]

3. This will affect very few seniors

Most of them set their income fairly low to minimize taxes, regardless of their actual wealth. I would bet only the top 1% will be affected by this, not that many seniors retire with more than $80,000 of annual income.

[goddess40]

4. Figures too low

This is Goddess40's mom. I am retired and my income is about $35,000 per year. My Part B was raised to $98 per month. When I started on Medicare in 2000 it was about $45 per year.

[salin]

6. The cost of tax cuts and "no new taxes"... the annual rates of increase

under pres. bush sr, and pres bush jr - double digit annual increases, vs. less than 5% annual increases in the Clinton years.

While I certainly understand the idea of means testing for part B (though I find how it got into the legislation quite disturbing - but that is another story altogether) - I think what you point out - the High rate of increases - and that the new rates as stated in the story suggest an even larger rate hike (up to $98 rather than $88).

To the brainwashed part of the public that still thinks that every tax cut for the wealthy is a good thing, and doesn't result in a cost increase elsewhere (usually for those who have the least compared to those who received the large cuts) - I hope you wake up to fiscal realities soon... otherwise these problems will long outlive jr - as the public will keep buying into fallacious political rhetoric that help the few (who need help the least) and will continue to exponentially cost everyone else for as long into the future as the eye can see.

[sandnsea]

8. That should be the story

I'm not defending how much Medicare is charging, I know it's not free. I'm just hoping they don't start using the 'means testing' of the premium as an excuse to scrap the entire drug benefit, even though the means testing part isn't hurting anybody.

[Lasher]

9. Oops, there's an important typo in my OP

Goddess40's Mom,

Where I said, "In 2007 it will be about $88.50 for individuals..." I meant to say, "In 2007 it will be about $93.50 for individuals...". This would be a 5.65% increase of just the base amount over the 2006 premium of $88.50. But more clarification is in order.

Premiums I cited for 2007 and beyond were based on earlier projections. I didn't have actual figures for future premiums at the time I put this OP together. This might surprise you but it wasn't easy to find this information even on historical premium increases.

So your Part B premium will go up to $98 per month in January 2007, and not $93.50? Hmmm, that's quite a difference. That means the 2007 base increase is 10.73%. And I can't say what the overall increase will be, since the new means testing clouds that beyond my humble ability to decipher. This is one thing that's bad about means testing: the confusion.

But based on your input I've changed my spreadsheet figure for the 2007 base increase and I've thrown 2008 & 2009 out the window. But I think it's a pretty safe bet that these future premium levels are not going to be lower than projected by my source. You have inspired me to seek more current figures and perhaps offer a revised OP on the subject at a later date.

[SoCalDem]

5. Heads up soon-to-be seniors

It's starting..

If you have kids you can trust, you best start seeing about "selling" your house to your kids(if you plan to stay where you are for the long haul)..

If they are going to inherit it when you "leave", why not rid yourself of that "asset" that might disqualify you from help down the line.

"Rent" it from them, and have the peace of mind, knowing that it cannot be "taken away" from you or signed over to strangers in a time of need.

Businesses have done this forever to protect assets.

[Hidden Stillness]

7. Something Really Wrong With This Whole Thing...

Several things do not make sense here, and it indicates something very threatening, yet again. Republicans are taking another step along this road where they are deciding that none of us are "good enough" to be on any of these programs, and destroying the universality of all Federal programs. The numbers do not make sense, as people with incomes far below what was claimed here, have already had Part B (hospitalization, emergency and long-term care) increases this past year--it went up by over 10% during 2006. I think part of the problem is the complete disaster that the Part D prescription mess was, with seniors unable to afford their prescriptions or premiums at all, people not signing up to the program (even though you cannot get any information, only how "wonderful" it all is), and people cut off Medicaid, Medigap, and programs of the pharmaceutical industry itself, where they were subsidized for offering free prescription drugs to those who cannot afford it.

Republicans have been trying to cut the payments to physicians for office visits for years, and now this new Medicare bill will do it, even though the main, and increasing, expense, is coming from hospital costs, not doctors' visits. The Part D corporate giveaway have been a disaster so huge, that it is bankrupting the larger Federal budget, scary and unstoppable, they cannot make up the amount by gouging Part D signers, and will not admit the crisis. They have made several attempts over the past several years to commercialize Medicare/Medicaid, and Social Security, kill Medicaid, cut services, cut payments to doctors, shift patients onto HMOs, and countless other things--and now this threat.

This will not only affect higher-income seniors--the claim doesn't even make sense, since there have been recent huge increases already, and they hit everyone, whether they can afford it or not. Making it a "means tested" program will change the entire premise of the obligations of Government to its citizens, and by appearing "reasonable" and "correct," will start dismantling the entire program right before the wool over our eyes. The figures they give are not even real! Remember this is the same crowd that passed the credit-card-industry-written bill enslaving people to their inflated, usurious debts by calling it a Bankruptcy Bill, and claiming that only deadbeats and people who splurge on themselves will be affected. Then it turned out that most personal bankruptcies are from medical emergencies and bills, and loss of a job or other income. Seemed like a "good idea," the ways THEY told it...

[Hidden Stillness]

10. Part of the Scam: "Recalculating" What Counts as Income

I just heard something on CNN Headline "News" channel yesterday that largely explains the kinds of scams Republicans are going to be running, as they try vainly to make up for the horrific National debt that they have caused by eliminating the taxes of rich people and corporations. As part of their section of financial stories, CNN Headline explained that for the first time, Republicans have changed the qualifications for what counts as "income," and so now, for example, seniors who sell their homes and make a one-time large amount of money from the sale, will be treated as "upper-income" people, as if they have this level of income consistently, year after year, and not as the never-to-be-repeated single event that it is! Because it will now be re-categorized as "yearly income," and not a one-time event, their Part B premiums will now surge, and remain high. This will affect anyone who has any one-time amount of money--winning a lottery (as unlikely as that is), getting anything from a will, an insurance or legal settlement of any kind, etc.


Remember also, that most older people eventually sell their houses because they become too poor to keep up the payments on all the things it takes to maintain a house, and so the very poorest, who had to sell because they cannot afford it any more, will be targeted as "upper income," and hit with greatly increased premiums they can't afford. No doubt, it will eat up any extra money they might have had to live on, from the sale of the house. The story ended with the "cheery" note, but with no proof of the claim, that the premiums will fall back down to correct levels "in future years." I have not heard any specific explanation of this disgusting new scam since, as all corporate media are censoring it and playing the game that "everything is wonderful"; they have only mentioned that there are "new ways of calculating" income, with no explanation. I don't know why people, "even on DU," are so easily duped by Republicans every time. Why do you not just presume that they are lying and that you have to find their outrageous ruse buried under all the hype...and here part of it is.